LEGAL PRACTICE AMENDMENT BILL, 2017 BRIEFING TO SELECT COMMITTEE ON SAFETY AND SECURITY MEETING OF 8 NOVEMBER 2017

INTRODUCTION 1. The Legal Practice Amendment Bill, 2017, amends the Legal Practice Act, 2014 (Act 28 of 2014). 2. The aim of the Bill is to address practical and technical issues of a non–contentious nature that will enhance a smooth transition to the new dispensation. 3. The Act consists of 10 Chapters. Parts 1 and 2 of Chapter 10 came into operation on 1 February 2015. These Parts deal with the establishment and mandate of the National Forum on the Legal Profession (the National Forum). 4. The remainder of the Act is not yet in operation and will not come into operation until the National Forum has completed its mandate. 5. The National Forum has a limited lifespan of 3 years, during which it must do what the provisions of Chapter 10 of the Act require. 6. This deliberate “phasing in” of the Act is to allow the legal profession (the National Forum) the opportunity to attend to unfinished business and prepare for the installation of the new regulatory structures contemplated in the Act. 7. The National Forum has identified certain technical aspects and proposed that the Act be amended to ensure a smooth transition.

Clauses 1 and 2 1. Clause 1 of the Bill amends section 4 of the Act which provides for the establishment of the South African Legal Practice Council (''the Council''), in order to provide that the Council only begins to exercise jurisdiction over legal practitioners and candidate legal practitioners when section 120(4) comes into operation, to avoid conflicting jurisdiction between the Council and the law societies. 2. Clause 2 is self-explanatory and amends section 6 of the Act and empowers the South African Legal Practice Council (the Council) to establish, promote, administer or assist in the administration of insurance schemes, medical aid schemes, medical benefit schemes, pension funds, provident funds, pension schemes or benevolent schemes for legal practitioners. There is a similar provision in the Attorneys Act, 1979.

Clauses 3 and 4 3. Clause 3 of the Bill amends section 23 of the Act which provides for the establishment of Provincial Councils. Clause 3(a) amends section 23(1) to provide that the Council must establish Provincial Councils, the areas of jurisdiction of which must correspond with the areas of jurisdiction of the Divisions of the High Court of South Africa, as determined by the Minister in terms of the Superior Courts Act, 2013. The Council may delegate to the Provincial Councils such powers and functions which, in the interests of the legal profession are better performed at provincial level. Clause 3(b) is a consequential amendment. 4. Clause 4 amends section 33(1) and (3) of the Act to provide that only practising legal practitioners may perform certain acts or render certain services for reward, by inserting the word “practising”. This enhances the protection of the public.

Clauses 5 and 6 5. Clause 5 of the Bill amends section 62(3) of the Act to ensure a smooth transfer from the “outgoing” Legal Practitioners’ Fidelity Fund Board (the Board), to the “new” Board of the Legal Practitioners’ Fidelity Fund, by allowing members of the outgoing Board to stay in office for a period of 6 months, pending the installation of the new Board in terms of section 62(1) of the Act. 6. Section 91 of the Act regulates the position of banks in respect of trust accounts. Clause 6 amends section 91(4) by allowing the Council or the Board to request a bank for a “transaction history”, rather than a “statement”, of any particular attorney’s trust account. A statement sometimes only reflect the bank balance whereas details of the transaction history of the account may be required.

Clauses 7 and 8 7. Clause 7 is an amendment to section 94(1)(e), consequential to the proposed amendment to section 23(1) in terms of clause 3. 8. Clause 8: 8.1 Section 96(4) of the Act currently provides that the lifespan of the National Forum is three years. The National Forum came into existence on 1 February 2015 and in terms of section 96(4) it will therefore cease to exist on 1 February 2018. 8.2 The National Forum will not be in a position to finalise its mandate as set out in Chapter 10 of the Act before that date and requested the Minister in terms of section 97(5) of the Act to extend the period within which it is supposed to submit recommendations to the Minister for purposes of making certain regulations. The Minister extended the period until 31 October 2018.

Clause 8 (cont) 8.3 Clause 8 extends the lifespan of the National Forum in order to allow it fulfil its current statutory mandate and the extended mandate as proposed in the Bill. It is proposed that the National Forum will cease to exist on the date of the meeting with the Council envisaged in section 105(3), which date may not be later than 31 October 2018. 8.4 Section 105(3) provides that the National Forum must, before its dissolution, meet with the Council for purposes of handing over. On that date the Council and Provincial Councils will become functional, the transfer of the assets and liabilities of the law societies to the Council will take place and the law societies will dissolve. 8.5 This extra time is necessary for the National Forum to finalise its statutory mandate and for the Minister to make regulations, on the recommendation of the National Forum, which are to be approved by Parliament. 8.6 Clause 8(b) deletes section 96(5) to correspond with the provisions of section 101 of the Act.

Clause 9 9.1 Clause 9 amends section 97 of the Act which sets out the terms of reference of the National Forum. 9.2 The mandate of the National Forum was originally intended to be limited to what was thought to be absolutely essential for purposes of preparing for the installation of the proposed new regulatory structures contemplated in the Act. 9.3 It has been suggested that the mandate of the National Forum is not broad enough to ensure a smooth handover of ongoing work carried out by the existing regulatory bodies (the statutory law societies) when the new regulatory bodies come into existence on a particular day. 9.4 The mandate of the National Forum in terms of section 97 is limited to certain rules and regulations as an interim measure.

Clause 9 (cont) 9.5 Sections 94 and 95 envisage the making of permanent regulations and rules, respectively, once the entire Act becomes operational. 9.6 It is proposed in clause 9(d) and (f) that the mandate of the National Forum be broadened to advise the Minister on the first set of regulations that must be made in terms of section 94 and to make the first set of rules in terms of section 95. 9.7 This will ensure that the rules and regulations are in harmony and will avoid a period during which there are no regulations while the Minister will need to make the regulations in consultation with the Council, once the latter has been established and functional. 9.8 If this amendment is not promoted the implication is that, when the Council takes office on a particular day, there will be no rules governing a number of issues in respect of which rules will be required. The Council will then not be in a position to carry out all of its regulatory functions until the rules have been made and published. The public interest will be compromised if such a situation arises.

Clause 9 (cont) 9.9 Once the Council is fully operational there is nothing that precludes it from later replacing or amending the rules made by the National Forum and requesting the Minister to amend the regulations initiated by the National Forum. 9.10 Clause 9(a) is consequential to the amendment to section 23 as provided for by clause 3. 9.11 Clause 9(b) and (c) effect technical corrections. 9.12 Clause 9(e) empowers the National Forum to negotiate a date on which the law societies will dissolve, a date which may not be later than six months after the commencement of Chapter 2 of the Act. Chapter 2 regulates the establishment and operation of the (permanent) Council.

Clause 10 10.1 Section 109 of the Act sets out the role and responsibilities of the National Forum regarding the promulgation of provisional or interim rules and regulations in preparation for the establishment of the permanent regulatory structures. 10.2 At present the role of the National Forum is limited in terms of making these rules and regulations. 10.3 Clause 10 therefore proposes the extension of the mandate of the National Forum to make recommendations for the first set of regulations as contemplated in section 94 and to make the first set of rules as contemplated in section 95 of the Act. 10.4 Clause 10 proposes consequential amendments to section 109 of the Act which confirm and give effect to the extension of the mandate of the National Forum as contemplated in clause 9.

Clause 11 11.1 Clause 11 amends section 114 of the Act which regulates the position of existing advocates, attorneys, conveyancers and notaries. 11.2 It looks after vested interests and enhances the protection of the public. 11.3 Clause 11 provides that attorneys who had the right of appearance in the High Court, Supreme Court of Appeal or the Constitutional Court in terms of any law before the commencement of the Act, will retain that right after the commencement of the Act.

Clause 12 12.1 Clause 12 amends section 117 of the Act, which contains transitional provisions relating to the existing statutory law societies. 12.2 The amendment proposes that the existing law societies must continue to perform their powers and functions until the date of transfer of assets, rights, liabilities, obligations and staff, from the current law societies to the Council or Provincial Councils as contemplated in section 97(2)(a), as amended by clause 9. 12.3 This will facilitate a smooth hand-over, particularly in respect of the functions currently carried out by the law societies and the staff of the law societies.  

Clauses 13 and 14 13. Clause 13 of the Bill amends section 120(3) of the Act to address practical realities and contribute to a smoother transition and commencement of the Act. 14. Clause 14 contains the short title of the Bill.